AHPAS PROTECT Case Studies and FAQ

Business Legal Expense Insurance

Legal expense insurance is an important risk management tool for SMEs and Sole Traders. It provides
affordable access to legal advice and representation when a business might otherwise be deterred from
exercising its legal rights. This includes pursuit and defence costs.
The legal system can be complex and expensive. Just an hour of a lawyer’s time can cost hundreds of
dollars and going to court could cost thousands. It may make financial sense for a business to protect its
organisation and legal position for these types of circumstances.

 

Through AHPAS membership, ARAG and ABC2 Solutions will be able to provide a mass discount for your needs.  

Why ARAG through AHPAS membership?

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Legal costs for Pursuit and Defence – If legal action is necessary, ARAG's legal expense insurance products are there to cover the legal costs and expenses of events covered under the policy. Legal Expense Insurance is a Before the Event cover.

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Legal Information Helpline – ARAG customers have access to our confidential legal information helpline for general information for an initial 15 minute consultation, between 9am and 5pm AEST on weekdays.

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Document Centre –ARAG customers have access to many helpful legal documents via ARAG’s Document Centre. All legal documents have been drafted by lawyers and can be easily customised.

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Online Quoting System -ARAG provides its Broker Partners access to an online portal to quote and bind.

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Local team - Underwriting, Sales and Claims experts on the ground.

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Tailored - To schemes, industry groups, employee and membership benefits.

About ARAG Australia

ARAG Australia is part of the ARAG Group, a global expert in Legal Expense Insurance. ARAG Australia has a locally based team, providing nationwide services to all Australian clients and partners, offering legal expense insurance policies under a binding authority as agent for the insurer of the products.
Summary of Cover
Business Comfort (1-9)
1. Employment If a current, former or prospective employee brings an unfair dismissal case against the business.
2. Employee Protection Where civil proceedings are brought against an Employee for unlawful discrimination.
3. Employment Restrictive Covenants A dispute with a former employee over the enforcement of a restrictive employment covenant.
4. Criminal Prosecution Defence If the business faces a work health & safety investigation with a threat to prosecute.
5. Property and goods If someone damages, trespasses on or causes a nuisance to the business premises.
6. Identity Theft A dispute arising from the use of Your personal or business information without Your permission to commit fraud or other crimes.
7. Statutory Licence An appeal against a decision to revoke, refuse to renew or cancel a business licence.
8. Compliance & Regulation If the business faces formal investigation, regulatory or disciplinary proceedings by a professional, regulatory or disciplinary authority.
9. Tax Protection If the business is subject to a tax audit by the ATO.
Business Elite (1-11)
10. Contract disputes If the business is subject to a dispute with a supplier or client over a contract.
11. Tenancy disputes If the business is subject to a dispute with a landlord over a tenancy matter.

For a full description of policy cover, conditions and exclusions, please read the policy wording. Limits of Indemnity apply to the product. Contractual and
Tenancy disputes (Business Elite) are an additional module to Business Comfort.

What happens if…

Employment example scenario*
Our Policyholder is a business owner who was sued for unlawful dismissal by a disgruntled ex-employee. The former employee alleged that he had been unlawfully dismissed and was seeking compensation. Policyholder A was worried as she knew her business could not afford to pay the compensation. Policyholder A had Legal Expense Insurance with ARAG. Policyholder A called ARAG and a claim was opened. An ARAG appointed lawyer handled the claim and negotiated a lower amount of compensation. Thanks to the company’s legal expense insurance, Policyholder A’s legal fees were covered under its Legal Expense Insurance policy.
*This is an example of how the product works only and is not a testimonial of actual customers or situations
Disclaimer: The insurer of this ARAG Legal Expense Insurance product is HDI Global Specialty SE – Australia (ABN 58 129 395 544, AFS Licence number 458776) (Insurer). ARAG Services Australia Pty Ltd (ABN 14 627 823 198, AFS Licence number 513547) has been granted delegated authority by the Insurer to enter into, vary or cancel policies and handle claims for ARAG Legal Expense Insurance products on the Insurer’s behalf. All enquiries should be addressed to ARAG. Any advice contained in this brochure is general advice only and has been prepared without considering your individual objectives, financial situation or needs. Before purchasing or renewing a product we recommend that you consider if it is suitable for your circumstance and read the policy terms and conditions.
Employment
ABC is a small business that employs 5 employees. Following repeated written warnings for tardiness and rude behaviour ABC provides written notice of termination. The employee was upset and felt that he has been treated unfairly and pursued a wrongful dismissal claim against ABC. ABC had followed the Small Business Fair Dismissal Code providing the employee with warnings before the termination. ARAG appointed lawyers to challenge the jurisdiction of the Fair Work Commission and negotiated the withdrawal of the claim. ABC had a nil excess. All legal costs were covered by ARAG.
Employee Protection
ABC has placed an advertisement on Seek looking for employees. A 75 year old sent in a CV and listed experience that was not relevant to the role. When the job applicant was advised they had been unsuccessful they brought a discrimination claim against ABC alleging age discrimination. ARAG appointed lawyers to defend the claim and the lawyers demonstrated the applicant was unsuccessful as his CV showed he did not have the necessary skills for the inherent requirements of the advertised position. All legal costs other than the excess were covered by ARAG.
Employment Restrictive Covenants

Jane and her employee have agreed to end Jane’s employment by mutual agreement. The agreement included a restrictive covenant that prevented the employee from contacting Jane’s customers, suppliers and other contacts or ‘poaching’ their business or employees. There is also a confidentiality clause prohibiting use of confidential information obtained during the employment period. However, some time after the employee left and moved into a different industry, Jane found out from former clients that they had received a copy of Jane’s client list as well as details of Jane’s suppliers from the former employee and now dealt directly with Jane’s suppliers and were going into business distributing Jane’s suppliers’ products. ARAG appoints lawyers to pursue damages from the former employee. After the commencement of legal proceedings, a damages settlement was negotiated with contribution to the legal costs paid to ARAG by the former employee. ARAG paid all legal costs incurred that were not recovered from the former employee other than the excess that Jane contributed.

Criminal Prosecution Defence

A worker was injured during the course of his employment when a contractor operating a forklift ran into the worker. The worker was hospitalised and the employer reported the incident to SafeWork. SafeWork undertook investigations. ARAG appointed lawyers to assist the business with SafeWork investigations including production of documents and interviews of employees. SafeWork determined not to prosecute the business and prosecuted the subcontractor for a breach of work health and safety legislation. ARAG paid all legal costs incurred in the investigation, as the insured had a nil excess.

Property and goods

A Council owned land adjoining a business’ premises. A large pine tree was on Council land. The business had not insured its property. The tree roots caused damage to drains, footpaths and driveways on the business’ premises. The business wrote to Council claiming rectification costs and the Council declined to compensate ABC. ARAG appointed lawyers to bring a claim for damages in nuisance against the Council and after commencement of proceedings, the lawyers negotiated payment of compensation and a contribution towards legal costs. ARAG attended to the payment of the legal costs that were in excess of the contribution to legal costs recovered.

Identity Theft
A fake invoice is issued on behalf of your business entity, using your business logo and contact details. The intent is to have funds directed into an unauthorised bank account. A recipient of this invoice become suspicious when they receive additional invoices for non-payment, contacts the police who investigate your business. The insured contacts ARAG and a legal representative is appointed to negotiate and elevate any credit or business reputational damage.
Statutory License
Following notification of a salmonella outbreak which appeared to be linked to a business with a licence to store food, the Regulator imposed conditions on the licence to address contamination concerns. The business declared the licence to ARAG when it took out legal expense insurance. With the assistance of an ARAG appointed legal representative the business challenged the additional conditions having them removed from the license. ARAG paid all legal costs incurred apart from the $1,000 excess selected by the business.
Compliance & Regulation
Disciplinary proceedings were brought against a nurse arising from care the nurse provided to residents in an aged care facility. ARAG appointed lawyers to assist the nurse with the disciplinary proceedings and appear on behalf of the nurse during those proceedings. The regulator found the alleged shortcomings in treatment were not proven. ARAG paid the legal costs of the appointed lawyer, less the applicable excess, which was paid by the insured.
Tax Protection
ABC has been lodging its BAS statements and Tax returns regularly. The ATO has announced its intention to look at compliance in a number of industries including the industry that ABC operated in. The ATO randomly selected ABC for a tax audit. After preliminary inquiries the ATO advised ABC’s accountant that it intended to audit the BAS lodgements of ABC. ARAG appointed accountants to assist with the audit and demonstrate BAS has been appropriately accounted for. ARAG met all costs of the appointed accountant other than the excess which was paid by ABC to the appointed accountant
Contract disputes
A business leased a telephone system, photocopiers and printers for 3 years from ED but the equipment was defective and stopped working after 2 months. After complaining to ED seeking to cancel the lease, asking for replacement equipment and asking for a refund, ED refused all requests, kept issuing monthly invoices and threatened to commence debt recovery proceedings to recover unpaid lease payments. ARAG appoints lawyers to recover damages from ED. After proceedings were commenced ED agreed to pick up the equipment, refund all moneys paid to ED and terminate the lease. The appointed lawyers secured contribution to legal costs from ED and ARAG paid the balance of the costs incurred in the proceedings less the excess.
Tenancy disputes
ABC have taken out a lease on a commercial property to run their business operations. In the contract, they were given full access to the storage facilities that would be exclusive to ABC. After a few months the landlord advised he was subleasing some of the storage facilities and would not reduce the rental currently being charged. This created distress and disruption to the tenant’s operations and resulted in them having to lease new storage options off site. Despite trying to negotiate a resolution with the landlord the Insured contacted the ARAG Legal Information Helpline for some guidance. The event was covered under their policy and ARAG appointed lawyers to assist in proceedings to claim damages and terminate the current sub lease and obtain orders requiring the landlord to cease and desist any further action. The tenant received compensation and orders were made requiring the landlord to vacate the property. The tenant regained possession of the storage facility, under their original tenancy lease. ARAG paid the legal costs of the appointed representatives assisting the landlord in the proceedings.

Disclaimer: The insurer of this ARAG Legal Expense Insurance product is HDI Global Specialty SE – Australia (ABN 58 129 395 544, AFS Licence number 458776) (Insurer). ARAG Services Australia Pty Ltd (ABN 14 627 823 198, AFS Licence number 513547) has been granted delegated authority by the Insurer to enter into, vary or cancel policies and handle claims for ARAG Legal Expense Insurance products on the Insurer’s behalf. All enquiries should be addressed to ARAG. Any advice contained in this brochure is general advice only and has been prepared without considering your individual objectives, financial situation or needs. Before purchasing or renewing a product we recommend that you consider if it is suitable for your circumstance and read the policy terms and conditions.